A Study On Development Of The Business Models Of The Internet Of Things

In 2005 International Telecommunication Union formally recognizes the concept of The Internet of Things. After the financial crisis sweeps the globe in 2008, The Internet of Things was instantly deemed as an essential impetus to get rid of the influence of financial crisis and promote economic recovery by nations around the world owing to its advanced technology, wide cover of industries, and the notion of intelligent and unified information service. The Internet of Things is identified as the next industry revolution, following internet, to change the shape of human life; its technology will evolve into a high-tech market with the scale of trillions of dollars, thirty times of the internet.Even though nations around the world have been optimistic about the development of The Internet of Things, its current market scale has a large gap from what relevant organizations have predicted. The governments and corporations around the world have invested in this field substantially, but its market application remains in a preliminary phase. Its main problems are the lack of business models to meet the market demand, and good feedback from the industry application, which result from lack of mining the characteristics of its applications, its too much emphasis on individual competition within the industry and the traditional commercial profitability, lack for mining of nature of public goods and service, and not enough reflection of the role of relevant public utilities.Based on the background information above and relevant studies, the following analysis and conclusions are made in this dissertation.1.The concept of The Internet of Things has been optimized. On the basis of its traditional concept, the new concept is put forward as:Through RFID, infrared sensors, global positioning systems, laser scanners and other information sensing device, The Internet of Things combines items with the network based on social, economic management and the practical applications, to enable information exchange and communications and realize intelligent identification, location, tracking, monitoring and management. Through intellisense recognition such as RFID, communications network such as Telecommunications network, the Internet and wide power grid, relevant technology and equipment of smart computing platform such cloud computing, all objects within the region can be connected into a unified global network, so that information flow, logistics, capital and value flow can be transferred and shared, and relevant data can be stored. By doing this, each node in the network can be intellisense recognized, located, tracked, monitored and managed.2.For the concept series of business models, business models are a series of systems in different phase of development in certain external policy, technology and market demand environment. The systems include the positioning of each of the main in the system, its value activities-products, services, channel strategy and business, the relationship between each of the main and the interaction among the value of flow, capital flow, information flow and logistics. The whole series of systems of business models are improved by the concept of business ecosystem and its operation mechanism is reflected by the interaction among the flows.3.On the basis of the study on the concept of The Internet of Things and business models, a detailed analysis on each part of the business models has been carried out. First, the external environment influence, which has been overlooked, is emphasized in that the mining of policies and regulations, technology development and market demand is the main external influence. On the other hand, the internal system is composed of the individual type, value model, revenue and profit model, competing relations and marketing model, all of which can be shown by logistics, capital flow, information flow and value flow.4.According to the composition of the business models of The Internet of Things, an index system of critical factors in its success has been built with the content of logistics, capital flow, information flow and value flow. Through the survey of subgroups of mass sample, the following conclusions are drawn.(1)The reliability analysis shows that the level of survey is improved when two indexes-products software prices and extended application prices, are excluded. Consequently, the final index system is divided by four groups with 42 indexes.(2)The mean analysis shows that the indexes that affect are sensor and chip performance, government spending, corporate income, products hardware prices, amount of charges, advertising investment, advertising income and the amount of investment and financing, unified coding, network speed, network capacity and information security, real-time status, real-location status, application convenience, application ease, public utilities, public service, regulation and integration, social welfare, etc. In general, the indexes of value flow draw more attention than other groups, the focus of which is mainly reflected in several key application areas of logistics network, as well as characteristics of public welfare services of the Internet of Things. The analysis on the mean of sub-groups reflects not only the trends of relevant interest of sub-groups, but also the need for preferential policies and effective supervision.(3)The factor analysis shows the factors of whole index systems can be categorized as internal performance, external performance, internal capital flow, external capital flow, network characteristics, information characteristics, welfare, application and expansion, among which welfare, network characteristics, information characteristics, external capital flow draw the most attention.(4)The hypothesis testing analysis shows the general testing of four groups of indexes is all obvious, which indicates that different groups of users will have different influence on the parts of business models. To be specific, the indexes that affect the most are interior performance, external capital flow, publicity and application, etc.(5)The critical factors of success are ultimately indicated by characteristics of public goods—the fit for relevant characteristics of public goods in classical theory and the reflection of the typical characteristics of public service; meanwhile, the development of The Internet of Things need the support of government investment, advertising investment, capital investment and financing, hardware modules investment, ubiquitous network environment construction and unified planning of information resources.According to the analysis on the survey, the embodiment of characteristics of public goods is researched. The Internet of Things have promising future technically and industrial applicability, which can occupy the production and life in the future. By analyzing the sub-groups of application, it is predictable that its industrial development can occupy almost every aspects of people’s life. Thus, in comparison with the traditional telecommunications, it is more obvious and inclusive in the role of people’s life. And it has more promising user scale and space, and has the potentiality to be a mode of public service, providing comprehensive and efficient intelligent public service for the user. By a certain period of infrastructure, technology development and marketing covering, its service in publicity and expansion of other business field will be more convenient and easily accepted by the users.5.In the design of business models, the following conclusions and results are made.(1)The current business models are mainly leaded by operators and system integrators. A single commercial business and custom service are provided. Its main problem is the lack of unified planning and technical standard system, dispersed industries and lack of efficient digging of need of users in the market.(2)When the development phase of business models is planned, the application of public utilities should be the start point. Then with the government as an impetus, the stage of development should be plotted marked with the ultimate improvement of the formation of market scale and the application system of technology market.(3)The preliminary model is public application, including public utilities operations, public platform lease operations, customer self-service mobile payment and free open platform, etc. In the maturity phase, other market subject is imported on the basis of core application in preliminary phase. More market competition characteristics are immersed, including system integrators oriented, single operators oriented, two-body operators promotion, operator’s independent development and promotions, users’self-service, etc. In senior phase-integration, cooperation becomes the core model of market relation. By gathering the resources from the government, integrators and powerful individuals and the unified orientation, different service application integration platforms are formulated and the high quality of service can be offered by the integration of favorable resources to form a better and wider range of service. Major models include software and hardware integrators oriented, software content integrators oriented, cloud computing platform and cloud polymerization, etc.6.Based on the analysis above, the following development strategies are advised(1)In respect of policy advices, The Internet of Things should be planned as a national strategy so as to improve the application level of national information and break information barriers. The relevant government sectors should strengthen the construction investment in preliminary stage and upgrade the regulation level of current application fields. Meanwhile, they should promote the construction of overall R & D, network infrastructure environment and security system. Training for professionals in this industry should also be improved by setting professional department in colleges and strengthening international communication, etc.(2)In respect of marketing, core areas of marketing demand must be covered, which will include information transformation, unique identification, intelligent environmental protection, safety and conservation, effective promotion of industry, as well as people’s needs in transportation, safety, medical treatment, education and social security. The value can be created and distributed by complementary resources, value activities, resource exchange. In respect of source of income, ways to increase income are put forward-reducing the costs of government security, urban management and personnel administration, besides the routine methods such business charges, advertising income, investment and financing. Besides the common business profits, more models of earning are advised-free and low charges service, ladder service, management cost reduction, input reverse leverage effect and paid transfer of management subject. The game theory analysis shows the importance of the cooperation between the individuals in the process of application. Marketing models are proposed-polymerization brand marketing, identity marketing, environmental protection marketing, location service marketing, personalized marketing, etc.